Brown Sticking With Health Plan Tax

The federal government says California must change its Managed Care Organization tax. Failing to do so could cost the state a billion federal dollars a year that help fund Medi-Cal. Governor Jerry Brown has proposed a tiered taxing system, but the idea has gotten limited traction.

Nancy McFadden is a top aide to Brown. During a panel discussion today McFadden said the administration continues to work on the tax, which funds Medi-Cal.

"We had a number of the health plans that were supportive and thought it was the right thing to do when you look at the overall healthcare system. That it was an appropriate contribution to make," she says. "We had a few that did not believe that."

McFadden acknowledges getting two-thirds of the legislature to approve the tax will be challenging. But she says the state has too many General Fund expenses to pay for Medi-Cal without the tax.

"There are a lot of costs coming down the pike that are not factored in. Labor negotiations, all of our unions are up. That’s going to put increased costs into the General Fund."

Brown has called a special session of the Legislature to deal with health care, and the session is ongoing.